9M ’14 Results presentation November 12, 2014
9M ’14 - Highlights � Negative market trend in Europe in the ICC&R business. � Sales increase in both ICC&R and Radiators. � EBITDA increase in both ICC&R and Radiators. � Net Result significant increase. � Positive Cash flow despite Equity investment in ICC&R. � Radiators turnaround is on track. � RC Group (ICC&R) acquires Aircotech (consolidation in Q4). � Dividend Policy The figures reported in the present document, including some percentage values, were rounded to the nearest Euro. Therefore, some totals in the tables may not coincide with the sum of constituent amounts. All 2013 data are reported. For comparison purposes 2013 figures have been restated according to the JV in China shareholders agreements amendments and IFRS 11 requirements. 1
9M ‘14 Sales breakdown and mix by Business Line Sales breakdown by business line Sales mix by business line Δ% Δ% €M 9M ‘14 9M ‘13 % total 9M ‘14 9M ‘13 ICC&R ICC&R 249,4 249,4 237,6 237,6 5,0% 5,0% ICC&R ICC&R 84,0% 84,0% 84,2% 84,2% -0,2 pp -0,2 pp Radiators 47,4 44,5 6,6% Radiators 16,0% 15,8% +0,2 pp Total 296,8 282,1 5,2% Total 100,0% 100,0% � Sales increase in both ICC&R and Radiators . 2
9M ’14 ICC&R Sales Trend by Geography - Change % vs. 9M ‘13 €M Δ% €M 9M ‘14 % tot 9M ‘13 % tot - Overall increase . - Europe slight increase with 63,3% 65,8% Europe 158,0 156,5 0,9% growth in South and North; West West stable stable and and East East 31,6% 29,2% Asia 78,8 69,2 13,9% decrease. - Asia and ROW significant 5,1% 5,0% RoW 12,6 11,9 5,4% increase . 100,0% 100,0% Total 249,4 237,6 4,9% 3
9M ‘14 EBITDA by business €M Δ% Δ% Q3 '14 Q3 '13 9M '14 9M '13 ICC&R 13,8 11,9 16,4% 34,7 32,7 5,9% % on sales 15,8% 14,7% +1,1 pp 13,9% 13,8% +0,1 pp Radiators Radiators 1,7 1,7 1,0 1,0 68,1% 68,1% 0,3 0,3 (1,5) (1,5) n.a.% n.a.% % on sales 9,0% 5,3% +3,7 pp 0,7% (3,4%) +4,2 pp Corporate & elimination (0,8) (1,3) n.a.% (2,8) (2,8) - % on sales n.a.% n.a.% - n.a.% n.a.% - Consolidated 14,7 11,6 26,6% 32,2 28,4 13,3% % on sales 13,8% 11,6% +2,2 pp 10,8% 10,1% +0,7 pp 4
9M ’14 Consolidated Income Statement €M 9M '13 ∆ % 9M '14 9M '13 impairment Net Sales 296,8 282,1 5,2% 282,1 Gross Margin 105,3 100,4 4,9% 100,4 % on sales 35,5% 35,6% -0,1 pp 35,6% EBITDA 32,2 28,4 13,3% 28,4 % on sales 10,8% 10,1% +0,7 pp 10,1% Impairment (0,1) - n.a.% (21,5) % on sales n.a.% - n.a.% (7,6%) EBIT 24,1 20,7 16,1% (0,8) % on sales 8,1% 7,3% +0,8 pp (0,3%) Group Net Result 12,0 10,4 15,5% (11,1) % on sales 4,0% 3,7% +0,3 pp (3,9%) EPS – Euro cents 8,0 7,0 15,5% (7,4) 5
9M '14 Net Working Capital trend €M ∆ Dec ∆ Sep Sep '14 Dec '13 Sep '13 '14/’13 '14/’13 Trade Receivables 85,4 75,4 78,3 10,0 7,1 21,2% 19,4% 19,5% +1,8 pp +1,7 pp % on 12 months rolling sales Inventory 57,5 46,4 58,2 11,1 (0,7) 14,3% 11,9% 14,5% +2,4 pp -0,2 pp % on 12 months rolling sales Trade Payables (98,8) (91,6) (98,3) (7,2) (0,5) - NOWC as (24,5%) (23,6%) (24,5%) -0,9 pp - % on 12 months rolling sales percentage of percentage of Net Operating Working Capital 44,2 30,2 38,1 14,0 6,1 revenues increase. 11,0% 7,8% 9,5% +3,2 pp +1,5 pp % on 12 months rolling sales Other short term assets / (22,6) (17,7) (20,7) (4,9) (1,9) liabilities (5,6%) (4,5%) (5,2%) -1,1 pp -0,4 pp % on 12 months rolling sales Net Working Capital 21,6 12,6 17,4 9,0 4,2 5,4% 3,2% 4,3% +2,2 pp +1,1 pp % on 12 months rolling sales 6
Sep ‘14 Consolidated Balance Sheet €M Sep ‘14 Sep ‘13 Sep ‘14 Sep ‘13 Net operating fixed 248,9 250,0 Net Debt 2,7 13,9 assets Trade receivables 85,4 78,3 Group Equity 257,4 243,7 Inventories 57,5 58,2 Minorities 27,5 25,9 Shareholders’ Trade payables Trade payables (98,8) (98,8) (98,3) (98,3) 284,9 284,9 269,6 269,6 Equity Short term assets & (22,6) (20,7) liabilities Net Working Capital 21,6 17,4 Net financial assets 16,9 16,1 Net Capital Employed 287,5 283,5 Total Sources 287,5 283,5 7
Consolidated Cash Flow as of 9M €M Q3 '14 Q3'13 9M ’14 9M ‘13 Net Debt beginning of period 6,0 20,0 7,0 17,3 EBITDA (A) 14,7 11,6 32,2 28,4 Taxes paid in the period (B) (2,3) (5,4) (4,2) (5,9) Change in provisions (C ) (0,2) 0,4 (0,1) 0,5 Change in working capital (D1) (7,0) 2,0 (11,6) 0,2 Adeo effect (D2) - 0,9 - (11,5) Investment activities (E) Investment activities (E) (2,9) (2,9) (1,9) (1,9) (7,6) (7,6) (5,2) (5,2) Operating Cash Flow (A+B+C+D1+D2+E =F) 2,2 7,6 8,8 6,6 Equity investment (G) (0,3) - (3,9) - Changes in net equity and financial activities (H) 1,4 (1,5) (0,5) (3,2) Cash Flow for the period (F+G+H) reported 3,4 6,0 4,3 3,4 Net Debt end of period 2,7 13,9 2,7 13,9 Adeo blocked receivables (I) - (0,9) - 11,5 Cash Flow for the period rectified (F+G+H+I) 3,4 5,1 4,3 14,9 9M ‘14 Cash flow includes the acquisition of the UK distributor in ICC&R. 8
Net Debt Breakdown as of September ’14 €M Sep ‘14 Dec ‘13 Sep ‘13 Net financial position (2,7) (7,0) (13,9) of which: of which: - positions with bank and other financial 2,3 (3,9) (9,8) payables - fair value of derivative financial instruments and options/payables for (4,9) (3,1) (4,1) investments 9
Important information RC Group (ICC&R) acquires Aircotech RC Group (DeLclima), a leading manufacturer with more than 50 years of experience and leadership in IT cooling and air-conditioning solutions, acquires Aircotech, that has been RC Group's exclusive distributor in Belgium, France and Luxembourg for many years. Aircotech promotes RC Group solutions in offices, hotels, hospitals, and retail buildings, as well as in datacenters, telecommunications and process cooling projects. Its success is based on the capability to offer full support to its customers, from the design stage, helping to identify the best energy saving solutions, to sales, commissioning, service and maintenance. energy saving solutions, to sales, commissioning, service and maintenance. The acquisition of Aircotech is consistent with RC Group's strategy to develop a more aggressive and dynamic approach to export sales, by investing in existing partnerships and progressively acquiring its strongest distributors. This approach reflects DeLclima's strategy to strengthen its operating companies by establishing their direct presence in all core markets. This acquisition, by strengthening RC Group's presence in a key area particularly relevant for IT applications, enables RC Group to further improve its market share and margins. 10
Important information Dividend policy DeLclima aims at granting a stable and significant dividend payment stream for its shareholders while providing increased long term value for their investment . In the absence of exceptional events, the Board of Directors will propose to the yearly Shareholders’ Meeting the distribution as a dividend of between 30.0% and 50.0% of Annual Profits, which is compatible with ensuring growth potential also through external lines, maintaining an appropriate and safe debt ratio. 11
Relevant Projects Q3 ‘14 - CLIMAVENETA Application: Process cooling - Automotive End user name: Volkswagen Plant type: Hydronic System Total installed Cooling capacity: 4.180kW VOLKSWAGEN EMDEN Installed equipment: GERMANY 4x TECS2-W/H 1053 Volkswagen aims to achieve a CO 2 -neutral status for its production processes by implementing a multitude of projects on environmental protection and sustainability. Emden production plant is an example of this commitment, with 400.000 m 2 "energy forest“ planted across a previously unused area of the plant and a 3000 m2 photovoltaic plant on the roof of Hall 10 generating the plant and a 3000 m2 photovoltaic plant on the roof of Hall 10 generating 350 megawatt hours of power every year. To achieve this quite ambitious sustainability target, four DeLclima high efficiency TECS2-W/H 1053 chillers have been installed to provide controlled process in the new bodywork production plant with the highest efficiency. Volkswagen has been using Climaveneta equipment in several of its plants across the world, for superior efficiency and reliability in their operations. TECS2-W High efficiency water source chiller 12
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